Billionaire’s exit prompts SL to seek new oil explorer?

Billionaire’s exit prompts SL to seek new oil explorer?

October 13, 2015   07:15 pm

Sri Lanka will issue a fresh international tender for offshore oil and gas blocks after billionaire Anil Agarwal’s Cairn India Ltd. relinquished its exploration rights in the South Asian island, the Bloomberg news agency reported today.


Cairn will be “departing in a couple of weeks” after coming to an agreement with the Sri Lankan government, petroleum minister Chandima Weerakkody said in an interview on Monday. The island nation will keep Cairn’s seismic study worth about $300 million and won’t charge any penalty for pulling out,” he said.
“We are at an advantage because we have all the data collected by them,” Weerakkody said. “Therefore we will go forward with the next step. We are going to expedite the international tender process.”


Sri Lanka, which doesn’t produce any oil or gas and imports all its needs from nations including Saudi Arabia, will hold an international roadshow this year to promote blocks on Sri Lanka’s western coast of Mannar. The island nation, where a three-decade civil war ended in 2009, is looking for technology to unlock the potential of the area neighboring India, where companies including Reliance Industries Ltd. and BP Plc are present.


Cairn India’s exit followed a one-time, non-cash impairment charge on acquisition goodwill for the the SL 2007-01-001 block, which covers approximately 3,000 square kilometers (1,158 square miles), in the quarter ended March. The charge was triggered by the fall in crude oil prices, which declined 43 percent in the past year. The company increased focus on producing more from fields in Rajasthan state in north India, while cutting overall capital expenditure.


Cabinet Approval


Sri Lanka’s cabinet in July approved inviting new international bids for commercial development of natural gas deposits found in the Mannar basin block.


“All the top oil companies believe that Sri Lanka is blessed with gas and oil,” Weerakkody said, adding that the government hadn’t considered offering incentives for exploration. Total SA, Europe’s third-largest explorer, is seeking a joint study in two blocks on Sri Lanka’s eastern front, Weerakkody said. Two other companies are also interested in conducting seismic studies in the island’s northern belt, he said without naming them.

(Courtesy – Bloomberg)

 

TAGS :  Oil ,  Sri Lanka ,  India ,
Disclaimer: All the comments will be moderated by the AD editorial. Abstain from posting comments that are obscene, defamatory or slanderous. Please avoid outside hyperlinks inside the comment and avoid typing all capitalized comments. Help us delete comments that do not follow these guidelines by flagging them(mouse over a comment and click the flag icon on the right side). Do use these forums to voice your opinions and create healthy discourse.

Most Viewed Video Stories

GMOA on protest against Acting Medical Superintendent of Pottuvil Base Hospital

GMOA on protest against Acting Medical Superintendent of Pottuvil Base Hospital

Wasantha Samarasinghe speaks on 53 enterprises chosen by govt to be sold off

An egg cannot be sold for Rs. 25, egg producers say

Meditation programs aiming mindfulness to be conducted at schools - Edu. Minister

Multilateral lenders will resume lending once IMF program in place - Coomaraswamy

Student critically injured after being torched; suspect arrested

Restaurant owners and several civil organizations meet with Trade Minister

IRD spent Rs. 10 Bn on revenue administration management information system, COPA hears (English)